The Organization of Petroleum Exporting Countries (OPEC) Wednesday for the first time in eight years agreed to cut oil production in an effort to bolster oil prices. It will cut production by 1.2 million barrels a day, to 32.5 million barrels, to take effect in January. On December 9, OPEC officials will also meet with Russia and other non-OPEC oil exporters to finalize agreement to reduce non-OPEC production by some 600,000 barrels a day. If a deal can be struck, OPEC and non-OPEC cuts would total 1.8 million barrels per day.
In response, the price of global Brent benchmark crude oil increased by 9 percent Wednesday and today reached a one-year high of more than $54. By mid-day today, the Dow Jones Industrial Average was up more than 49 points, to nearly 19,171. Read more about Expectations Rise
So primed were pre-election markets to expect a Hillary Clinton victory that, as returns came in on November 8, U.S. stocks plummeted 5 percent in after-hours trading as a Donald Trump victory became clear. Trump’s gracious and conciliatory victory speech in the early hours of November 9 turned things around, and the market then rallied as attention turned toward the economic impact of Trump’s likely policies. On Monday, all four major U.S. stock indexes closed at new all-time records for the first time since 1999.
Yesterday, the four-pronged rally continued, as the Dow Jones Industrials broke 19,000 for the first time ever and closed at 19,023. The S&P 500 moved in lock-step to close at an all-time high of nearly 2,203. The Russell 2000 closed at a record 1,334.43. And the tech-heavy Nasdaq composite closed at more than 5,386. Read more about Optimistic Markets Spike 11-23-16
Little more than a week after the presidential election, economists seem to agree that when he takes office the administration of Donald Trump will likely introduce an era of increased U.S. economic growth and higher interest rates. Generally economists now expect that efforts to cut taxes and regulations and to invest in the crumbling U.S. infrastructure (roads, bridges, airports, water systems and even the electric grid) could stimulate substantive real economic growth, as opposed to the fiscal stimulus of the last several years that produced little.
As a result of the election, stocks have rotated somewhat, with health care, defense, and financial stocks turning upward due to the expectations that they will benefit from the presumed Trump economic programs. Worries about a downturn in international economic growth have subsided as well. Read more about Economic News Picks Up 11-17-16
President-elect Donald Trump met with President Obama at the White House this morning, in the wake of his upset victory on Tuesday. Given Trump’s gracious and conciliatory tone on Wednesday morning, Obama returned the favor and the markets bounced back and have since remained calm.
After noting the “debt of gratitude” that we owe Hillary Clinton for her long history of public service to the nation, Trump also reached across the political divide to embrace all Americans at a time “to come together as one united people.”
“I pledge to every citizen of our land that I will be president for all Americans,” he said. “To those who chose not to support me—of which of which there was a few—I am reaching out to you to ask for your guidance and your help so we can work together to unify our great country.” Read more about Stocks Rebound, Commodities, Pharmaceuticals and Banks Especially Strong 11-10-16
The U.S. Department of Labor reported that U.S. productivity increased by a seasonally adjusted 3.1 percent in the third quarter, a strong increase although the hours worked rose by far less. This is good news compared to the three consecutive quarterly declines in productivity that occurred in the last quarter of 2015 and the first half of 2016—the longest period of negative readings since the 1970s. From April through June, productivity fell by a revised 0.2 percent rate, down from the estimated 0.6 percent decline noted last summer, the Labor Department also reported today.
Meanwhile, last quarter saw a 1.7 percent increase in inflation-adjusted hourly wages, up slightly over last quarter.
Read more about Productivity Gains, Flat Rates and Nervous Markets 11-03-16